Research:Publications:Working Papers FY2010(english-8,japanese-4)

The United States and East Asian Regionalism: Inclusion-Exclusion Logic and the Role of Japan / Takashi Terada

2011.02.28

Working Papers

Excellent papers on Asian regional integration, which are prepared mainly by young researchers such as GIARI members, co-researchers, research fellows, and research assistants, will be published as working papers. Contributed papers, written in English or in Japanese, will be reviewed and examined by the editorial committee before publication. GIARI donates published papers to the libraries of Waseda and other related universities, research organizations, etc.

GIARI Working Paper Vol. 2010-E-3

A rivised version will be published as a chapter in Mark Borthwick and Tadashi Yamamoto (eds.) A Pacific Nation: Perspectives on the US Role in an East Asia Community, Japan Center for International Exchange, 2011, pp.95-118.

Index

The United States and East Asian Regionalism in 1990s

The Rise of China and the Establishment of the EAS

The Regional Integration Movement in East Asia

Obama, Hatoyama, and the East Asian Community

Conclusion

Over the past several decades, as regional economic institutions have begun to take root in East Asia and the Pacific, Japan.together with Australia.has taken a leadership role in helping to organize major initiatives such as the Pacific Economic Cooperation Council (PECC) and the Asia Pacific Economic Cooperation (APEC) forum. Japan also played a pivotal role, as did China, in the development of East Asian regional institutions such as the Association of Southeast Asian Nations Plus Three (ASEAN+3) and the East Asia Summit (EAS), while simultaneously contributing to the regional proliferation of bilateral free trade agreements (FTAs). A chief and consistent element of the Japanese approach to these institutions has been its advocacy of “open regionalism,” a symbolic phrase that connotes Japan’s preference for US engagement in any Asian regional institution.

Any regional grouping that is defined by a concept also needs to identify its geographical boundaries. Without clear and agreed-upon boundaries, there can be no demarcation of the “region” upon which regional institutions are created. This feature of regionalism bedevils those nations that are geographically excluded from regional institutions, since nonmembers tend to have increased anxiety that exclusion will entail harmful policy outcomes. The United States, for example, is not geographically located in East Asia and thus is not seen as a natural member of East Asian regionalism despite a general acknowledgment of its significant contribution to stability and prosperity in the region. Therefore, Japan has striven to promote open regionalism primarily to pave the way for US participation in East Asian regionalism.

US engagement in East Asia has primarily evolved around its bilateral arrangements: bilateral security treaties with key allies such as Japan, Korea, and Australia, which are perceived as regional stabilizing mechanisms; and bilateral trade relations with major markets such as Japan, which are intended to promote exports. This means that the United States has not viewed the regional institutions in which it is an official member.such as APEC or the ASEAN Regional Forum.as practical organizations for attaining concrete policy goals. John Ikenberry labels these kinds of American East Asia policies “hard bilateral security ties and soft multilateral economic relations.” The American bilateralism-centered regional engagement, dubbed a “hub-and-spoke” system, has served as its preferred regional approach in both the security and economic arenas. This has helped the United States exert influence on its trading and security partners more effectively and directly, based on its predominant military and economic superiority. As Ralph Cossa states, given the remaining regional flashpoints such as the Korean Peninsula, the Taiwan Strait, and the South China Sea, “no US administration will likely allow such [multilateral] mechanisms to substitute for or threaten US bilateral alliances and other US-led security arrangements.”This approach to regional security has remained “unaltered” even under the Obama administration, as Secretary of State Hillary Clinton declared in a speech in Honolulu in January 2010.

In addition to the propensity to pursue bilateralism in East Asia, Charles Morrison attributes the unenthusiastic American attitude toward these regional institutions to their process- rather than outcome-oriented features. On the other hand, the United States has at times strongly repudiated an East Asian regionalism that has threatened to exclude US participation. As will be discussed below, the proposals for an East Asia Economic Caucus (EAEC) and an Asian Monetary Fund (AMF), in which Japan was supposed to take a leading role, are prime examples of this phenomenon. The United States viewed these proposals as advocating the development of outcome-oriented institutions that would potentially be detrimental to its interests, and it consequently pressured Japan, as its powerful regional agent, not to support or lead either of these initiatives.

East Asian regionalism finally started to flourish after the ASEAN+3 was established in 1997, amidst the gloom cast over the region by the Asian financial crisis. It was widely noted at the time of the crisis that the United States failed to demonstrate a strong commitment to helping the region. The United States did not oppose the emergence of the ASEAN+3 because, unlike the cases of the EAEC and the AMF, the ASEAN+3 was established without any clear future agenda and with only a tentative path toward institutionalization, leading the Americans to conclude that it would be mostly process-oriented and thus relatively harmless to US interests. Yet the United States was forced to change its “benign neglect” attitude toward East Asian regionalism during the 2000s due to two substantial developments in East Asia: the rise of China and the growth of preferential trading arrangements promoted by East Asian states. The United States was concerned that, given China’s huge market, rapid economic growth in that country was exerting an overwhelming influence on regional trends in East Asia, and that China’s aggressive trade diplomacy was responsible for the regional proliferation of FTAs, which excluded the United States.

The United States employed two approaches to tackle the problems arising from the inclusion-exclusion logic in East Asia. The first was an indirect approach: the Americans encouraged Japan, its key ally and agent in East Asia, to actively support initiatives to include nations that share the common value of democracy.such as Australia, New Zealand, and India.in the formation of another, more US-friendly regional institution, the EAS, which was established in 2005. The second was a direct approach: utilizing APEC and US membership therein to parallel and hopefully overshadow East Asian integration. In 2008, the United States expressed its desire to formally join a new trade initiative, the Trans-Pacific Partnership (TPP) Agreement, as a stepping-stone toward an APEC-wide Free Trade Area of the Asia Pacific (FTAAP). This decision was premised on the US belief that, as stated by US Trade Representative (USTR) Ron Kirk, “the number of trade agreements in the Asia-Pacific that exclude the United States has proliferated, shutting American business and workers out of valuable opportunities.”As a result, the first TPP meeting in which senior officials from eight APEC members participated was held in March 2010 in Melbourne.

This chapter will examine how the United States, an outsider, has engaged in East Asian regionalism directly and indirectly to manipulate regional trends in its favor. The regional structure surrounding East Asian regionalism can be partly characterized by the inclusion-exclusion dichotomy: the United States, influential on regional stability through bilateral security arrangements, is normally viewed as an outsider in matters of East Asian regionalism, and the development of East Asian regionalism has been substantially influenced by this structure. This chapter will demonstrate how the United States has acted when it has believed that a development in East Asian regionalism would be detrimental to its interests. Specifically, it argues that the United States has used a strategy of maneuvering Japan, its key ally in the region, into the role of managing regionalism in the interests of the United States. The failure to realize the EAEC and the AMF, which Japan ultimately backed away from, and the establishment of the EAS, which Japan supported, were outcomes resulting from American requests and can thus be attributed to Japan’s susceptibility to American pressure. Finally, this chapter explores the potential implications for East Asian regionalism of new diplomatic thrusts in the United States and Japan, including President Obama’s East Asian engagement and Prime Minister Hatoyama’s East Asian community proposal.